Rethinking College Towns

As a practitioner in both consulting and local government, I have observed that in local communities nothing seems to prompt productive action better than a local crisis or strongly felt threat like a factory closure.

Unfortunately, we are often inclined to take action to close the barn door only after the horse has escaped.

That may be why “college town economic development” could be considered the ultimate oxymoron. Higher education has been a growth industry for half a century. As a result, college towns and university neighborhoods have prospered in good times and bad and typically see little reason to pursue economic growth.

New realities in the economy and technology, however, mean their admirable invulnerability is no longer assured. The paradigm of guaranteed growth in college town USA is coming to an end.

More Debt, Fewer Jobs

As this is written, the Occupy movement on campuses is protesting high tuition costs and the $25,000 average debt that comes with the diploma, with even the Secretary of Education in a Democratic administration calling upon colleges in a Las Vegas conference November 29 to cut their prices.

Increasingly, what doesn’t always come with that diploma these days is a job or even a place to live away from mom and dad. Corporate cost-cutting, offshoring, and white collar automation promise fewer jobs for our graduates even beyond the current slowdown. And the growth of for-profit universities, fast-track degree programs, and lower-cost distance learning offer strong competition to the traditional economic base of college towns that relies on large numbers of students spending four years in their town.

In addition, there is likely to be a reduction in the number of future college students, as the millennial or “echo boom” begins to pass through their teens and early twenties. To survive, college towns have to reinvent themselves in order to “find a new way to prosper and thrive” in future years.

Additional Roles for College Towns

These various threats to colleges place the economy of the town or neighborhood outside the campus in even greater jeopardy. Thanks to technology, professors can now deliver their services to customers who have never set foot in town. College town barbers and pizza places cannot.

But happily, the college town has the potential for even greater growth than the university, not being narrowly tied like the latter to instruction and research nor to serving a single age group.

The key to that growth lies in marketing. But that’s an activity college towns have seldom done well when they’ve done it at all. Colleges themselves have often mystifyingly underperformed in this pursuit.

Despite the college town’s current prestige and trendiness, there simply won’t be enough high tech to fill the space in every college town with aspirations for a research park. And tech is unlikely to create jobs in places with only small non-research colleges.

But colleges’ assets can lend themselves to college town success not only as “A Place to Learn” and “A Place to Research” but also as “A Place to Visit” and “A Place to Live.”

A Place to Visit or Live

As detailed in The Third Lifetime Place, college towns have significant opportunities to further develop and market themselves to potential visitors as “A Place for Sports and Entertainment,” “A Place to Heal,” “A Place to Meet,” and even “A Place to Vacation.” The biggest payoff, however, may be from marketing the college town as “A Place to Come Home To” during working years or “A Place to Retire” thereafter.

College towns are already taking off as retirement destinations. With the now-beginning retirement of the huge Baby Boom generation, a college town with advantages for retirement that doesn’t develop and market them is simply leaving money on the table.

But the technology that enables telecommuting and the money it saves both corporations and independent entrepreneurs can also make the college town a great place to live for workers who are not faculty or college staff. The advantages of good schools and small town living that so many families pay top dollar for in metropolitan suburbs can be readily found in many college towns and with a smaller price tag.

A Unique Competitive Advantage

As places to market for living or retirement, college towns are blessed with a unique competitive advantage: their status as the Third Lifetime Place (TLP) in the lives of thousands of alumni.

Most of us have a special place that joins in lifetime significance the place where we grew up — which will always be “home” — and the place where we’re spending most of our adult lives. This third place is or was a pleasurable temporary refuge from both work and home responsibilities.

The traditional TLP has been the year-after-year vacation spot. Later becoming the location of the second home, the final validation of its TLP significance was its choice for retirement. The most conspicuous success among traditional TLPs has been Florida, which moved from vacationland status to Retirement Central and also a favored place to locate a business, take a job, or hold a convention.

But as suggested in The Third Lifetime Place, for the highly college-educated generations that started with the Boomers, the four or more years spent in the college town may make it a more potent TLP than the place at the lake where they spend two weeks every July.

The most enjoyable and often most life-changing years of one’s youth were often those spent in the college town. Lifetime devotion to the football team, return trips to campus for reunions, and gifts to the alma mater testify to the strong feelings graduates have about these years. And emotional appeals are probably the most potent force in marketing anything.

Obstacles to Overcome

But despite the powerful TLP marketing advantage, business as usual on campus, in city hall, or in the chamber of commerce office will not be enough to make the economic payoff happen.

The most daunting impediment may be an “if-it-ain’t-broke-don’t-fix-it” complacency, the consequence of a seemingly bulletproof prosperity. Another is a left-of-center activist political climate that is characteristically anti-business and anti-growth which commonly results in high local taxes or high levels of regulation.

Unfortunately, a long history of dominating the provision of a universally popular product like higher education no longer assures places perpetual prosperity. The poster child for that reality is Detroit. The Motor City once figured it would keep riding high so long as Americans continued to buy cars. But that’s not what happened.

Per the Chinese character that designates both “danger” and “opportunity,” the effects of changes in higher education on college towns will depend on how our towns respond to them. And that will depend to a large degree on the quality of their business, civic, and political leadership.

John L. Gann, Jr., President of Gann Associates, Glen Ellyn, Illinois--(800) 762-GANN—consults, trains, and writes on marketing places to grow sales, jobs, property values, and tax revenues. Formerly with Extension at Cornell University, he is the author of How to Evaluate (and Improve) Your Community’s Marketing published by the International City/County Management Association.

E-mailed information on The Third Lifetime Place: A New Economic Opportunity for College Towns is available from the author at citykid@uwalumni.com.

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I'm not sure about this analysis. There will be changes, but college towns tend to be filled with people who are very innovative and adaptive, not to mention highly educated and trained.

I live in a small college town (Iowa City, IA where the University of Iowa is located). We have a number of large employers besides the University such as some factories. We are surrounded by prosperous cities in Eastern Iowa and are in a state with tons of economic diversity and stability. We are also on a major highway (I80) that connects to major cities such as Chicago.

The University of Iowa operates one of the best hospitals in the country. They also have many research labs. The number of students have increased in recent years coming in from other states and other countries. The Iowa City government also has invested a lot in infrastructure and services. Iowa City has been listed in top 10 and top 100 lists for many differen reasons: great small town with culture, great place to retire, great place to start over, etc.

I don't entirely know the reasons, but the U of I and the IC government are doing something right. A big factor is having a diverse economy which Midwestern states tend to have. A college town that solely relies on the college may be in trouble in the coming decades.

I agree with this article. There are going to be plenty of college towns that will find themselves in big trouble when the college bubble bursts. It will happen someday, nothing is immune to economic reality. Colleges have had a very long "good time" and many will not believe it when the bill is due. Being a "college town" is no better off then being a "company town".

I think that college towns don't draw as much business to a place as most make it out to be. It may actually drive away some industries (some college towns are artificially overpriced). So many towns will find they have little in the way of employment after the college money drys up.